Priya Haji and Siddharth Sanghvi think they can build a good business out of good intentions.
Theirs is a new spin on a decades-old concept. The fair or alternative trade movement for handicrafts has its roots with mid-century missionaries.
In the mid-1940s, the Mennonite-run Ten Thousand Villages formed to help artisans in Third World countries sell their traditional crafts in North America. In the late 1940s the Church of Brethren formed SERRV International -- short for Sales Exchange for Refugee Rehabilitation and Vocation -- which sought to help refugees in Europe recover from World War II by importing wooden cuckoo clocks from Germany to the United States.
Today scores of alternative and fair-trade organizations, nonprofits, wholesalers and other businesses have sprung up to sell everything from coffee to carvings while ensuring long-term contracts and that 15 percent to 30 percent of the retail price of the products goes to the artisan.
Proponents of the grassroots international movement say the benefits of fair trade are manifold. Workers get safe and healthy conditions. Families can afford health care and to send their kids to school rather than to work in farms and factories. Fair trade also preserves the environment and ancient artistic traditions.
Critics say fair trade isn't always as fair as it is portrayed. Proponents would like artisans to make more and for consumers to pay less so that fair-trade goods supplant sweatshop goods on store shelves. But some retailers mark up fair-trade goods to make a larger profit while promoting themselves as good corporate citizens. Competing fair-trade logos and claims also can confuse consumers. Coffee, tea and a few other commodities are the only products currently certified as fair trade.
"We want to show that fair trade can be fair priced," Haji said. "It should be fair to the customer, fair to the producer, fair to everybody. That's the idea."
For decades fair-trade products have sold briskly in Europe but are just catching on in the United States. North American sales of fair-trade goods accounted for $180 million in 2002 -- up 44 percent from 2001 but a tiny fraction of overall U.S. retail sales. In 2002 total sales for fair-trade handicrafts were only $13.8 million in a North American gift market that generated $55 million in sales. Though global sales of fair-trade goods exceeded an estimated $700 million in 2003, less than 0.01 percent of goods meet fair-trade standards.
"How do we make sure as trade relations grow with other countries that everyone gets opportunity?" Haji asks.
Haji believes the answer lies in the recent rise of so-called conscious consumerism. More companies are catering to this growing niche of shoppers who are willing to spend more money for goods that espouse social consciousness from soy milk to eco-friendly hair products. In 2003, about 32 percent of U.S. consumers were significantly motivated in their purchases by concern for their health and the environment in a market estimated at $226.8 billion, according to the Natural Marketing Institute, a health-products consulting firm.
"There is a groundswell of support for buying products that are not made in sweatshops and that do not contribute to destroying the environment," said Amanda Johnson, spokeswoman for nonprofit Co-op America. "How little we know about where we get most of our products is driving the need to know more. This consciousness is really creeping into the mainstream."
Most consumers still conspicuously shop for price and value, but the growing demand for socially conscious goods has caught the attention of corporate America. A recent survey from consulting firm Wirthlin Worldwide found that 82 percent of consumers say good corporate citizenship has at least some influence on their buying decisions. Up to 86 percent of consumers in national surveys say they would pay more for "sweat-free" goods, and up to 90 percent of consumers in another survey said they would buy products from companies who share their values.
Susan Oelker, a buyer for Whole Food Markets in Berkeley that recently installed a World of Good kiosk, says she tries to stock products that support the community. "Especially in the Bay Area, customers appreciate having that option," she said.
The growth of the fair-trade movement and pressure from human rights organizations have led some mainstream American companies to discover the gilded lining in stocking these goods. Four years ago, Starbucks began selling more expensive fair-trade coffee, and last year Dunkin' Donuts began making espresso drinks with fair-trade beans. Supermarkets are selling everything from chocolate to bananas with fair-trade labels.
The buy-green vogue may be ubiquitous in the Bay Area, but it remains a blip in the U.S. retail market. "Generally speaking, protesting with your wallet is not a part of the American culture right now," said Berkeley brand strategist Steven Addis. "This is a niche. It's a powerful niche because there is a lot of disposable income in this group of consumers. But it is not something that is projected to be a part of the mainstream in the near future."
Slow sales of fair-trade goods in the United States illustrate the difficulty in winning over customers who can buy cheaper goods from manufacturers that use low-wage foreign labor.
"There are two forces in the market, the one that is often referred to as the Walmartization of America, the other contradictory force is the development of these kinds of socially oriented brands," Haji said. "Fair trade will never account for 100 percent of all coffee or cosmetic bags sold, but I believe that conscious consumerism can slowly shift the whole market.
"Even if it ultimately affects only 5 percent of all buying, every other company in the other 95 percent will have to start thinking differently."
Haji's vision for her nascent company may be lofty. Nonprofits with minuscule marketing budgets long have struggled to reach out to mainstream consumers and raise awareness of the fair-trade movement.
"There is no doubt in my mind that if given the right choice that people will make the right choice. But if they don't know the choice is out there, you can't blame them for not making the right one," said Tex Dworkin, the online store manager for Global Exchange, which carries fair-trade goods, including a "sweat-free" sneaker. "Instead of sitting and waiting for consumer demand, we need to reach out to customers and say, 'Here we are and this is what we are doing.'"
Every sale matters, says Pamela Battaglini-Pegues, spokeswoman for Maya Traditions, a small fair trade wholesaler in San Francisco and Guatemala that sells everything from tote bags to pillows woven by Mayan women in rural villages in fair-trade and museum shops. She hopes World of Good will open up new markets. "We are hoping ... that we will reach people we don't normally reach," Battaglini-Pegues said.